Auditors add disclaimer to Instore accounts

AUDITORS FOR the main company of the Instore group have provided a disclaimer as to whether the company’s financial statements give a true and fair view of the state of the company’s affairs.

Instore Distribution Ltd is the main arm of the Instore group, which was established in Limerick in 1988 and now employs 100 people in six stores across the Republic in Limerick, Middleton, Waterford, Galway and Dublin.

Accounts for the company recently filed with the Companies Office show that the furniture retail company plunged into the red, recording losses of €1.7 million in the 12 months to the end of February 2009.

This followed the company recording a pre-tax profit of €288,073 the previous year.

The losses mainly arise from the company recording an exceptional cost of €1.34 million in relation to the provision for losses in group and connected companies.

The directors state that “the company has experienced a very difficult year as a result of the downturn in the economy. The slowdown in the construction sector has significantly reduced demand in the furniture sector.”

In their report, the directors state that the company can only meet its obligations as they fall due on condition that it has the continuing support of its bankers and other group companies.

“The bank support is being provided on a short-term basis and there is no certainty as to how long it will continue to provide this support as this is a matter solely for the bank,” according to the directors.

They point out that all group and connected companies, with the exception of Instore Cafe Ltd, are involved in the sale of furniture and accessories. “The companies’ ability to generate positive cash flows is dependent on an upturn in the economic environment in which the companies operate.”

At the end of the period, the company had net liabilities totalling €1.2 million.

In their report, dated December 8th last, auditors, Morrissey McCrann Company cited the company’s disclosures on its ability to continue as a going concern, its banking facilities and the trading environment in which it operates.

The auditors stated that because of the potential significance to the financial statements of the combined matters disclosed by the company, they were unable to form an opinion as to whether the financial statements give a true and fair view of the state of the company’s affairs.

The company’s directors are listed as John and Oliver Moloney. The company declined to comment.